1、CHIEF INVESTMENT OFFICE Viewpoint Digging Deep February 2025 All data,projections and opinions are as of the date of this report and subject to change.IN BRIEF We continue to expect Equities to outperform Fixed Income throughout 2025.Webelieve another move forward on our rotation theme takes hold in

2、 the first halfwith more cyclical companies beginning to experience improved fundamentals.Amore diversified set of leaders is still one of our top themes for 2025.Generative Artificial Intelligence(GAI)is heading into phase two,in our view.In thisphase increased competition kickstarts accelerated in

3、novation,wider adoption,andrapid efficiency gains across the corporate landscape.With our expectations that the Federal Reserve(Fed)will be in a holding patternfor all of 2025 and the 10-year U.S.Treasury yield to end the year around 4.75%;the yield curve is likely to be in a similar shape in a few

4、months to where it iscurrently.We would use weakness in the equity markets as buying opportunities and majorvolatility(up or down)as rebalancing events over the course of the year.In this months Viewpoint,we discuss a number of below-the-surface trends and potential clues that help to assess investm

5、ent trends through the first half of the year.First,the level of interest rates and the yield curve to begin 2025 are telling us quite a bit about the short-and medium-term trends in the bond markets,in our view.With our expectations that the Fed will be in a holding pattern for all of 2025 and the

6、10-year U.S.Treasury yield to end the year around 4.75%;the yield curve is likely to be in a similar shape in a few months to where it is currently.Inflation gauges and the duration of imposed tariffs are the clues to watch for any material changes in the yield curve.Corporate earnings across a wide